Gold slumps on rosy U.S. jobs data

Forexpros - Gold prices dropped on Friday in wake of surprisingly strong jobs data hitting the wires in the U.S., which sparked a risk-on trading session marked mainly by stock-market gains that sent gold falling.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,743.05 a troy ounce, down 0.92%.     

Gold futures were likely to reach technical support at USD1,729.35 a troy ounce and resistance at USD1,752.45.

In the U.S., the Bureau of Labor Statistics reported that the economy added a net 243,000 nonfarm payrolls in January, well above market expectations for a gain of around 150,000.

The news sparked demand for assets like stocks on hopes for a stronger U.S. economy, which marred gold's luster.

Furthermore, the better-than-expected gains in the U.S. labor market fueled sentiments that the Federal Reserve was now less likely to inject liquidity into the economy via quantitative easing, a monetary policy designed to avoid deflation and encourage investment, although the dollar weakens as a side effect.

Gold often strengthens when the greenback weakens.

Elsewhere on the Comex, silver for March delivery was down 0.89% and trading at USD33.870 a troy ounce, while copper for March delivery was up 3.25% and trading at USD3.904 a pound.